Interior Department Report Addresses Strategy
for Managing Indian Trust Money Accounts

WASHINGTON - Assistant Secretary of the Interior for Policy, Management and Budget Lynn Scarlett today released a report prepared by the Department of the Interior at the direction of Congress that addresses the department's approach to evaluating and improving the management of Indian trust accounts. The report, titled "Report to Congress on the Historical Accounting of Individual Indian Money Accounts," was ordered as part of Interior appropriations legislation enacted for FY 2001. The document, available for public review, is part of a series of steps that the Interior Department is taking to evaluate and improve the management and accounting of Individual Indian Trust Money Accounts.

"This historical accounting project is complex, challenging and enormous," Assistant Secretary Lynn Scarlett said. "We will work with the Congress to implement an effective methodology for providing an accurate reconciliation of trust accounts for Indian beneficiaries."

The 100-page report prepared by the Interior Department's Office of Historical Trust Accounting focuses on strategies and methods for the historical accountings of all funds held in IIM accounts, the estimated cost associated with the project and a time frame for completing the effort.

Secretary Gale Norton created the OHTA on July 10, 2001, under secretarial order 3231, to ensure that the department applies an orderly, timely and accurate process to the historical accounting of Indian trust accounts. OHTA is responsible for conducting an historical accounting of IIM accounts and ensuring the accuracy of its data. The report released today will help OHTA in its efforts to develop the methodologies and processes for managing money accounts held in trust by the U.S. government that are deposited or invested for the benefit of Indians and Indian tribes.

OHTA has designated December 31, 2000, as the end date or cutoff for the historical accounting period. There are 235,984 IIM account holders, with $348.3 million held in trust on their behalf, and $208.4 million in average annual throughput--money collected and paid out during the years 1985-2000. To date, more than 7,900 IIM accounts that comprise $22.7 million have been reconciled by OHTA. The OHTA review estimates that it will take about 10 years at a cost of approximately $2.4 billion to complete the historical accounting of IIM accounts.

OHTA estimates that the total money collected since 1909, the year of the first trust fund balance, is approximately $13 billion. The average trust fund balance has been approximately $140 million during these years. Today there are approximately 4 million owner interests in 10 million acres of individual Indian trust owned lands.

Adding to the complexity of the trust accounting systems, property allotted to individual Indians was inherited through a system of undivided interests to each direct descendent or other heir. As a result, present-day allotted land parcels can vary from one to more than 1,000 owners with undivided interest. Most Individual Indian money accounts result from the allotment and transfer of title to individual Indians of formerly tribal lands, following passage of the General Allotment Act of 1887.

By 1891, Congress recognized that many allottees were unable to benefit financially from their land parcels and authorized the Department of the Interior to lease allotments on behalf of individual Indians, first disbursing funds through Indian agents on each reservation. In 1908, Congress authorized monies from rents, leases and sales of property for individual Indian property owners and their heirs to be deposited and disbursed centrally by the Department of the Interior, which led to the establishment of IIM accounts within the Department of the Treasury.

The report released today is available on the Internet at www.doi.gov/ohta or can be obtained by contacting Mr. Bert T. Edwards or Mr. Jeff Zippin at the Interior Department's Office of Historical Trust Accounting at (202) 208-3405.